Wage and Hour Division (WHD)

US Labor Department investigates Happy Hollow Club, finds more than $65,000 in back wages due for 38 workers at country club

OMAHA, Neb. -- Happy Hollow Club Inc., in Omaha, has paid 38 employees a total of $65,705 in back wages following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which found minimum wage, overtime and record-keeping violations of the Fair Labor Standards Act.

“The Labor Department continues to make a concerted effort to protect vulnerable, low-wage workers who may not know their legal rights under federal labor laws. Businesses are obligated to pay their workers fairly and abide by these laws,” said Michael Staebell, director of the Wage and Hour Division’s district office in Des Moines, Iowa. “We have seen continuing problems in the restaurant industry. The department remains committed to resolving these violations, especially for hard-working Americans at or near the minimum wage.”

The investigation found that Happy Hollow Club required servers to turn a percentage of their tips over to the employer to help defray the cost of wages for bus help. Under the FLSA, tips are the property of the tipped employee and/or employees participating in a valid tip pool. An employer cannot require servers to turn in tips. Additionally, an employer of a tipped employee is required to pay no less than $2.13 an hour in direct wages, provided that amount, plus the tips received, equals at least the federal minimum wage of $7.25 per hour. If an employee’s tips, combined with the employer’s direct wages, does not equal the minimum wage, the employer must make up the difference.

The country club also improperly classified some employees as exempt from overtime requirements and failed to pay them time and one-half their regular rates of pay for hours worked beyond 40 in a workweek. Instead, the employer paid these employees fixed salaries without regard to the number of hours they worked. The job duties and/or salaries of employees, including pool staff, a mechanic and some accounting staff, failed to meet the specific criteria required for an exemption to apply. The investigation also found that the employer failed to keep time records for some employees, as required by the FLSA.

Happy Hollow Club has agreed to comply with the FLSA in the future. The back wages have been paid.

The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. To qualify for an exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. For an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the department’s regulations.

The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

For more information about the FLSA and other federal wage laws, call the Wage and Hour Division’s toll-free helpline at 866-4US-WAGE (487-9243) or visit http://www.dol.gov/whd.

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